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LIVE LONG AND PROSPER: Getting Old Can Still Be Fun and Profitable |
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As a Financial Planner, I often meet seniors who seem to be expecting the worse and counting the days towards the end. Often thay want to invest for the short term as if they will need all of their loot for some grand expense in a few years or months. In this article, I emphasize how this way of thinking can be flawed and result in a lesser quality of life. Enjoy. |
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| Author: Jason Valavanis Cfp |
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Very often I will meet with new senior clients and many of them are over the age of seventy. We’ll talk of different investment ideas of which some have a seven or ten year horizon. Of course, I’m always careful not to commit all funds to a long-term strategy, but it makes sense if there are plenty of assets to work with.
Just last week, one 71 year-old gentleman insisted on all short-term investments for his portfolio. He was convinced that he was not going to live too long. He told me that his father and mother died early and he has already outlived all of his siblings. My heart sank.
I looked at his face, skin and posture. His hair was gray and much of it was still there. He appeared lean and strong. All of his faculties were still in place and he communicated well at our meeting. I asked "why do you feel this way"? He said "I don’t know. I’m just amazed I lived this long in the first place". I asked if he was sick or had any ongoing complications. He said "no, not really".
This is a classic case of “the glass is half empty” syndrome. Seniors are constantly being reminded that they should be dying in their mid to late seventies – at best! That’s absurd. I currently have clients that told me back in the early 1990s that they are living on borrowed time! I specifically remember my retired dentist client who lives in Titusville. He insisted that we only invest in bonds with a 2 to 3 year maturity because he was already 75 years old. This was in 1994, and today he is still as cranky and boisterous as he was back then. Oh, yes, since then, I have convinced him to diversify and take advantage of the opportunities in longer term investments. He is extremely satisfied and much richer now than he was in 1994. To this day, he ballroom dances on Friday nights and plays Texas hold’em poker twice a week.
Does it make sense to plan for the early death instead of the later death? I understand that we all should position our necessary safety nets in case of the unexpected. But to plan for the worst case scenario as if it were the only plan is simply crazy.
In reality, I have clients well into their late eighties who are having a blast with their lives. They travel, exercise, belong to local clubs, participate in community events and even work part time! If I had invested their money as if they had only a few years left, I would be doing a grave disservice. And, of course, if they insist that short-term investments are the best choice for their entire portfolio, they may just be leaving opportunities on the table. Even worse, if the senior investor does live longer than expected and only invested as if they were short-term visitors, they could go broke. Outliving your money is not fun. Wouldn’t you rather have your money outlive you?
I believe if we keep a positive attitude, eat a well-balanced diet, exercise often, and free our lives of the negative influences that keep us feeling and looking old, we may be surprised how long we live! It sounds logical to me, but who am I to make such a call? It’s your call; live long and prosper.
About Author
Jason ValaVanis graduated from the University of Central Florida with a degree in Aerospace Engineering. He performed as an mechanical-optics engineer for Martin Merietta on the Cobra Helicopter and the F-16 Fighter Jet night vision systems. He maintained a DOD secret security clearance for his work on Military sensitive weaponry. From there, he was recruited to launch Atlas Rockets for General Dynamics at the Cape Canaveral Air Force Station. At KSC, he was a Systems Launch Engineer for 19 Atlas rocket launches and was a part of placing our GPS and military satellites in Geo-Stationary orbit. In 1990, his love for Financial Planning extracted him from the space program. With his math background, he attended college again where he completed his Professional Education Studies Program towards the coveted Certified Financial Planner Boards License. After passig the two-day Board Exam, he earned his Board Certification in Financial Planning from the College for Financial Planning in Denver. He formed two financial firms where he now manages over $85 million. His focus is simple and always remains the same: Preserve wealth while increasing income, reducing risk, reducing taxes, and creating the lifetime legacies for our loved ones. Jason is a local author where he has published over 60 articles on financial planning and facing life's money challenges. He is currently writing his first book titled: The Road to Domestic Wealth; How to Turn $50,000 into $5 million in 20 years.
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